Transaction cards (e.g., credit cards, debit cards, bank cards, charge cards, smart cards and the like) have become increasingly popular for purchasing goods and services and for conducting other transactions. Moreover, online and telephone based transactions are becoming even more popular as the number of online merchants increases. In its early stages, however, consumers were reluctant to use transaction cards over the Internet and/or telephone due to security concerns. To overcome the apprehension of the consumer to conduct purchases online, several secure protocols and cryptography schemes have been employed to better ensure that the consumer's transaction information remains private as it is electronically transported from one location to another.
Conventional Point of Sale (POS) transactions are normally facilitated by inserting, or sliding a transaction card through, a card reader which automatically downloads the card information, thereby allowing the information to be used during the authorization process without the need for manual input or review of the card information. This type of transaction is often referred to as a card present transaction because it is much easier to verify that the transaction card is in the presence of the transaction cardholder because it was required to be inserted into the POS terminal. Because card present transactions are generally viewed as being secure, transaction card providers are often willing to accept most of the fraud risk for lower risk merchants. For example, if a transaction card is stolen and used to facilitate a number of purchases, neither the cardholder nor the merchants who had accepted the transaction card for payment will be held responsible. Instead, the card issuer will provide payment to the affected merchants and the cardholder will not be billed.
Telephone and Internet based purchases do not constitute card present transactions, because it is often difficult or impossible to be assured that a transaction card used to facilitate a purchase is in the hands of the cardholder. Such transactions are often referred to as Card Not Present (CNP) transactions and the fraud risk is often shifted to the merchant. As such, many online merchants have been reluctant to accept transaction cards as a form of payment for online purchases. To attempt to overcome the substantial risk to online merchants, the use of transaction card information is often supplemented by various fraud prevention techniques such as, for example, only shipping purchased products to the billing address associated with the transaction card account. While some merchants have been willing to assume fraud risk by allowing items to be shipped to an address other than the account holder's billing address, others have been reluctant to do so. When a merchant requires the billing and shipping addresses to be the same, account holders are unable to have purchased items delivered to an alternative address such as, for example, a relative, friend or a place of business.
Accordingly, a system is needed which allows the consumer to purchase items for shipment to any desired address maintained by a credit account issuer. Further, there is a need to provide merchants with assurance that a shipping address has been verified by the cardholder's account issuer. Moreover, there is a need to provide credit account issuers with assurance against fraudulent purchases, such that a credit account issuer may more comfortably accept liability for fraudulent purchases.